Is TDAmeritrade Stock A Buy After Earnings?

For investors, buying TD Ameritrade Holding Corp.

stock was noted to be "solid" and "fairly well positioned," by analysts at Bank of America Merrill Lynch on Wednesday. BofA Merrill Lynch maintained a Buy rating with a PT of $28.31 for the stock. The firm indicated in their research note that AMTD reported an EPS of $0.39, beating BofA Merrill Lynch/Street expectations of $0.38/$0.36, mainly from its lower tax rate and forecasted expenses. "Overall, a good quarter with mostly healthy revenue drivers (solid organic growth, improved investment product fees, and rising spread-based revenues) and well controlled expenses, " BofA Merrill Lynch commented. TD Ameritrade reported mixed earnings revenues. BofA Merrill Lynch noted that the company's top-line results were down 1 percent y/y transaction revenues. The analysts highlighted that TD Ameritrade's net new asset (NNA) growth was strong, at $17.5B. BofA Merrill Lynch sees "continued strength" in TD Ameritrade's NNA growth, however modestly lower than a "strong" 4Q. The firm noted that the company's expenses are forecasted to be "seasonally higher" and TD Ameritrade's tax rate is could "normalize higher" post benefit. Analysts at BofA Merrill Lynch also expect buybacks to be given due to the stock's decline in share price and having fewer restrictions in the quarter. "We continue to see long term upside from asset growth, rates/margin upside, volatility exposure & exp/cap mgmt," BofA Merrill Lynch commented. "Despite the macro uncertainty, we continue to see potential in AMTD from core growth, rising rates or volatility, and active expense and capital management," the firm noted.